The German hospitality sector is experiencing a modest improvement in sentiment as the peak travel season begins, but pessimism remains dominant, according to a new report from the Ifo Institute in Munich. The business climate index for the sector edged up for the fifth consecutive month in June, rising from -16.5 to -15.3.
Despite a general reticence in consumer spending, many segments within the industry have benefited from stable demand, noted Caroline Vogel, an industry expert at Ifo. However, concerns linger due to a somewhat challenging start to the year, the effects of which are still being felt. The outlook for the summer season provides limited cause for optimism.
Almost 58 percent of surveyed accommodation providers cited weak demand as a constraint in April, a significant increase from just under 40 percent a year prior. Consequently, a larger proportion of businesses are considering job cuts over the next three months. While the issue of labor shortages has lessened somewhat, 41 percent of surveyed businesses continue to report difficulties filling qualified positions.
Compared to the previous month, businesses have assessed both the current business situation and expectations slightly more favorably. The business situation index rose from -9.2 points in May to -7.9 points in June. Business expectations also saw a minor increase, climbing from -23.6 points to -22.4 points.
The hospitality sector encompasses a broad range of businesses, including hotels, guesthouses, inns, vacation homes and apartments, hostels and campsites, all offering paid overnight accommodations.